More trouble has struck financially-embattled container ship operator Rickmers Maritime, which wants bond holders to accept payouts far less than they invested.
Now a group of retirees, businessmen and others who have each sunk $250,000 or more into the bonds issued by the trust are demanding to get their principal back in full, with interest, immediately.
They are trying to do this by exercising a so-called "acceleration" clause in the bond contract.
Rickmers, a trust, has already said it will not be able to pay $4.2 million worth of coupons due November, unless note holders agreed to lose more of their principal.
It got off on the wrong foot with note holders at a meeting two weeks ago, when Mr Soeren Andersen, chief executive of Rickmers Trust Management, urged note holders to swap their $100 million principal for $28 million perpetual bonds, convertible into 20 per cent of units in the trust.
Note holders balked at the 60 per cent haircut even as Rickmers units continued to slide to an all-time low of 3.8 cents on Monday. Rickmers said the swap would allow it to access a $260.2 million bank facility.
A week later, Rickmers revised its offer, proposing a swap of the $100 million principal for $40 million due November 2023, and exchanging the rest for 60 per cent of the trust, after issuing 1.32 billion new units. The $100 million 8.45 per cent notes had been due next May.
Many note holders remained unpersuaded, as there would still be no cash on the table for them.
Retiree Jeremy Tan, 77, who bought $2.25 million of notes, said: "Many issuers such as AusGroup and Marco Polo Marine are restructuring but Rickmers has proposed the worst deal."
More than 50 note holders who together hold $26 million of Rickmers notes have signed an acceleration notice, delivered to trustee DB International Trust yesterday.
The trustee must verify the identities of the note holders and check that their combined holdings cross the 25 per cent threshold before passing the notice on to Rickmers.
The notices could prompt creditor banks to file claims over the trust to protect their own interests.
Many note holders The Straits Times spoke to said they are prepared for the worst. A businessman, who preferred to be known as Mr Kok, said: "I hope not to lose my principal, but we must show a position."
Steel businessman Ong C. T. said he was prepared to forego $250,000. "I'm holding bonds of six or seven other oil and gas issuers. I want them to think twice before they try to bulldoze note holders."
A group of bondholders of Rickmers Maritime Trust are filing an acceleration notice with the trustee of Rickmers, demanding 100 per cent of their principal and coupon immediately. Photo: The Straits Times
Once fragmented, the note holders started to coalesce after a meeting called by Rickmers two weeks ago. They then scrambled to find one another via social media.
They have provisionally engaged consultant Deloitte, whom they hope can find common ground with Rickmers' adviser, PwC, to figure out a workable plan.
Mr Kok added: "We need to have an independent adviser for us to have a clear understanding of the financial situation of the company."
Rickmers Trust Management said in a statement yesterday evening that it had not received any notice from the notes trustee that the notes are immediately due and payable.
This article was first published on September 29, 2016.
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